Suits Me® Simplified: Banking 101

Are the Days of Plastic Debit Cards Over?

We discuss how plastic debit cards may become a thing of the past with the evolution in online banking and contactless mobile payments.

Broken debit card in women's hands. White Laptop, pen and notepad on desk with pink background. plastic free payment method concept.

When plastic debit cards first came on the scene more than half a century ago, the days of cash were said to be numbered. 

Then, in the 1980s, when debit cards with magnetic strips started to find their way into everyone’s wallets, the move towards a cash-free society seemed to accelerate. 

However, even as we enter the third decade of the 21st century, cash is still knocking about and it could be the days of our flexible plastic friend that are numbered instead. 

The use of debit cards, firstly to withdraw money from ATMs, and then to pay for items of varying values, either online or instore, exploded towards the end of the 20th century, but with the rapid development of digital technology, new payment methods are threatening the future of plastic debit cards. 

Contactless Mobile Payments

As smartphone technology, and perhaps more importantly, security has evolved, the mobile payment app has now become a widely used tool to pay for small value items instore. Apple Pay, Google Pay and Samsung Pay are the leading apps for mobile payments and are generally used by people to pay for things like a cup of coffee, a snack or lunch or a few items from a supermarket. 

Much like contactless debit cards, mobile payments apps were limited to £30 per transaction, however, the recent coronavirus crisis has led to an increase of this limit to £45 as more and more retailers insist on contactless payments for hygiene reasons. 

Research showed that in 2019, more than eight million people in the UK used a mobile payment app at least once. The fact that number accounts for less than 20% of all smartphone users suggests that mobile apps still have some way to go to gain the sort of penetration bank cards currently enjoy. 

More Banking Technology on the Market 

As with most banking innovations, technology is leading the way when it comes to mobile payments. As well as the main mobile payment apps which many smartphones users have, other players are coming onto the market and expanding the capability of mobile payments. 

PayPal, for example, is carving out some space for itself and has the added benefit of allowing users to send and receive money through proximity mobile payments. 

What Does This All Mean for Plastic Debit Cards? 

Although the uptake on mobile payment apps appears to be slow, industry experts expect the next decade to see a steady rise in their use. Smartphones are already an essential item for most people and incorporating the ability to pay for items in shops and online into them is something of a gamechanger. 

However, plastic debit and credit cards may not be doomed just yet as they can perform many functions which mobile payment apps cannot, such as withdraw cash from ATMs.  

They can also be used to pay for items of larger value, with the added layer of security from chip and pin technology. 

It may be only a matter of time before mobile apps catch up and the biometric security features in many smartphones could lead to expanded use of payment apps, however, it seems that plastic bank cards will be around a little while longer. 

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